Answer:
If you're using the term "sweepstakes" to mean "lottery"
National Banks - 12 U.S.C. Section 25a
State Member Banks - 12 U.S.C. Section 339
State Nonmember Banks - 12 U.S.C. Section 1829(a)
OTS - Home Owner's Loan Act, 12 USC 1463(4)(e)
The term “lottery” includes any arrangement whereby three or more persons (the “participants”) advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the “winners”) will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes—
(A) a random selection; (B) a game, race, or contest; or
(C) any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.
The simplest definition for a sweepstakes is "game of chance." The choice of a winner is entirely random -- no skills or payment by the winner are required. Although you may limit by age or geography, you may not, under most states' promotions laws, require someone to buy a product before being eligible to win a prize. Doing so runs the risk of being considered a lottery.
If the sweepstakes offer required a donation or payment to participate, it could be subject to challenge under the postal lottery statutes (Title 18 U.S. Code, Section 1302; Title 39 U.S. Code, Section 3005). In addition, the Federal Trade Commission (FTC) has authority to deal with unfair or deceptive trade practices which may result from the operation of particular sweepstakes.
In addition to federal statutes, some states have their own regulations concerning sweepstakes. To find out more about a given state's regulations, an inquirer should contact the office of the attorney general in that state.
First published on BankersOnline.com 1/07/08
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